Dot Dot Smile was a multi-level marketing (MLM) company that sold children’s clothing. It was founded in 2013 and is located in Riverside, California. The company was sued in 2021 by the Direct Selling Self-Regulatory Council (DSSRC) for making false and misleading earnings claims.
Background
The DSSRC is a national advertising self-regulation program administered by BBB National Programs. The DSSRC investigates claims made by direct selling companies to ensure that they are truthful and accurate.
The DSSRC’s inquiry into Dot Dot Smile was based on earnings claims disseminated by the company and its salesforce members on social media. These claims suggested that participants in Dot Dot Smile’s business opportunity could earn significant income.
Investigation and Findings
The DSSRC found that Dot Dot Smile’s earnings claims were not supported by evidence. The DSSRC also found that the company had failed to adequately monitor its salesforce members to ensure that they were making accurate claims.
Settlement
Dot Dot Smile settled with the DSSRC in 2022. The company agreed to pay a $4.75 million settlement and to modify its earnings claims.
Impact on Consumers
The Dot Dot Smile lawsuit is a reminder for consumers to be cautious of MLM companies that make unrealistic earnings claims. Consumers should do their research before joining an MLM company and should be aware of the risks involved.
FAQs
Q: What is an MLM company?
A: An MLM company is a business model that relies on its members to recruit new members and sell products or services. MLM companies often make unrealistic earnings claims and can be difficult to succeed in.
Q: What are the risks of joining an MLM company?
A: The risks of joining an MLM company include:
- Losing money
- Investing a lot of time and effort without seeing results
- Being pressured to recruit new members
- Being misled about the company’s products or services
Q: What should I do if I think I’ve been scammed by an MLM company?
A: If you think you’ve been scammed by an MLM company, you can report the company to the Federal Trade Commission (FTC). You can also file a complaint with the Better Business Bureau (BBB).
Q: Is Dot Dot Smile still in business?
A: No, Dot Dot Smile filed for bankruptcy in 2022.
Q: What happened to the money from the settlement?
A: The money from the settlement was distributed to consumers who had been harmed by Dot Dot Smile.
Q: What can I do to protect myself from MLM scams?
A: To protect yourself from MLM scams, you can:
- Do your research before joining an MLM company.
- Be wary of any company that makes unrealistic earnings claims.
- Avoid companies that pressure you to recruit new members.
- Be careful about investing a lot of time and money into an MLM company.
Conclusion
The Dot Dot Smile lawsuit is a reminder for consumers to be cautious of MLM companies that make unrealistic earnings claims. Consumers should do their research before joining an MLM company and should be aware of the risks involved.
References
- Direct Selling Self-Regulatory Council (DSSRC): https://bbbprograms.org/programs/all-programs/dssrc/
- BBB National Programs: https://bbbprograms.org/
- Dot Dot Smile Files for Bankruptcy: https://www.businessinsider.in/international/news/dotdotsmile-a-childrens-clothing-subsidiary-of-mlm-giant-lularoe-has-filed-for-bankruptcy-citing-more-than-5-million-in-unpaid-debts/articleshow/94045975.cms